Slot route operator ‘blindsided’ by Gaming Control Board ruling

The owner of a slot machine route operation, whose wife is partner in a potential medical marijuana dispensary business, said state gaming regulators “violated the standard of due process” when a restaurant was told last week to find a different company to manage its slot machines.

By HOWARD STUTZ LAS VEGAS REVIEW-JOURNAL

July 15, 2014 - 5:26 am

Bruce Familian, sole owner of Nevada Gaming Partners, a slot machine route operation, said Monday he “was taken by complete surprise” when the Gaming Control Board stipulated that Crab Corner restaurant on South Rainbow Boulevard could only operate its five slot machines if it contracted with another slot route operator. (Howard Stutz/Las Vegas Review-Journal)

The primary owner of a slot machine route operation, whose wife is an investor in a potential Clark County medical marijuana dispensary, said state gaming regulators “blindsided” him when they told owners of a Las Vegas restaurant — where he was set to manage five slot machines — to find a new partner.

In an interview Monday, Nevada Gaming Partners owner Bruce Familian said several of his current clients have been told by state gaming agents they need to find another route operator because of Thursday’s ruling. Nevada Gaming Partners manages slot machines in roughly 40 Las Vegas bars, taverns, convenience stores, and restaurants.

“Right now, I’m in damage control,” Familian said.

Familian said he “was taken by complete surprise” when the Gaming Control Board stipulated the Crab Corner on South Rainbow Boulevard could only have its slot machine license if it contracted with a different slot route operator.

The ruling still has to be approved by the Nevada Gaming Commission on July 24. Familian plans to attend the hearing in Las Vegas, but it’s unclear if he will be allowed to testify on the matter because his company is not on the agenda.

Familian believes the Control Board’s action “violated the standard of due process” for his business.

Nevada Gaming Partners was rejected as the route operator for Crab Corner because Sarah Familian owns an 8 percent share of GB Sciences Nevada LLC. In June, GB Sciences was awarded one of 18 medical marijuana dispensary licenses by the Clark County Commission.

The decision marked the first time gaming regulators have ruled on a licensing matter concerning a gaming business in light of the state’s fledgling medical pot industry.

In May, the Control Board admonished gaming license-holders and prospective license applicants to avoid the medical marijuana business because of continued federal enforcement of anti-drug laws.

Bruce Familian said he owned the original stake in the medical marijuana dispensary, but his wife bought him out after the Control Board’s industry notice was published. The Nevada Gaming Commission upheld the Control Board’s decision.

However, Familian and his attorney said Monday the Control Board’s original memo never addressed ownership in medical marijuana by family members of license holders.

Las Vegas attorney Joshua Reisman said the notice discussed only “investment” by a gaming license holder.

Once Bruce Familian sold the stake to Sarah Familian, he was out of the investment.

Gaming Commission upheld the Control Board’s original ruling a month later. Reisman said commentary by Commissioner Tony Alamo Jr., who is now the chairman of the panel, backed the notion that the board’s ruling had nothing to do with family members.

Bruce Familian said he and his wife have separate businesses and separate property.

“Our only connection is that we’re married and we have a child together,” he said. “Our money is separate.”

Gaming Control Board Chairman A.G. Burnett said at the hearing the agency wants a clean line of separation between the holders of gaming licenses and medical marijuana licenses.

“Our notice reaffirms what federal law clearly states,” Burnett said in an email. “Regardless of whatever legal measures are taken to separate the finances and businesses between spouses, the fact remains that a licensee would be married to an intentional violator of federal criminal law.”

Reisman said the Control Board would have had to file a complaint against Nevada Gaming Partners before making its ruling last week.

“Even if the Control Board’s position is that married couples cannot be sufficiently separated while marijuana remains illegal at the federal level, the fact remains that, in this case and at this point in time, no laws have been broken, no incidence of a gaming violation has occurred, and no complaint has been filed,” Familian said.

Familian said he provided the Control Board with documents showing his sale of medical marijuana holdings to his wife. He said a meeting with Control Board officials was set for Friday in Carson City, “well ahead” of last week’s hearing.

“I had no idea that they were going to make a de facto determination of unsuitability without providing me an opportunity to respond or make remedy,” Familian said.

Burnett said it was within the control board’s “discretion and purview” to look at medical marijuana matters on a case-by-case basis.

“In this instance, a restricted applicant was approved for its gaming devices but a warning was issued to them not to utilize a slot route operator whose wife wishes to engage in what amounts to a federal violation,” Burnett said.